Question:
How do Forward Markets work?
Author: eric_galvaoAnswer:
-On the Forward Markets, Contracts (Futures) are made at a Price Agreed Today, but for Delivery Later. -Futures help Firms who Export and Import Goods. They can 'Lock in' an Agreed, perhaps Favourable Exchange Rate between the Buyer's and Seller's Currencies. Certainty and Confidence can be Built -However, either Firm could be at a Disadvantage, depending on what occurs to the Exchange Rate. -You can also see Commodities occur in a Forward Market too - Price for a Future Coffee agreed in Advanced
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